Psychological factors affect the decisions we make every day. Of course, most of us are blissfully unaware of the tendencies that influence our actions. However, businesses can use the hidden psychology driving our behaviors to yield big profits.

From the work that we do, to the habits that we form, to the rationalizations we make, our behavior and mental state influence tastes and preferences in unusual ways by getting us to invest in products and services in seemingly inconsequential ways.

Labor = Love

In a 2011 study, three researchers measured how work affects the value of things.

University students were given instructions to assemble an origami crane or frog. After the exercise, students were asked to purchase their creation, bidding up to $1. Meanwhile, a separate group of students located in another room, unaware of the identity of the builders, were asked to bid on their origami using the same procedure. Similarly, a third independent group was asked to bid on expert-made origami under the same criteria.

The results showed that those who made their own origami animals valued their creation five times higher than the second group’s valuation, and nearly as high as the expert-made origami values. In other words, those who invested labor into their origami associated greater value with their paper creations simply because they had worked on them.

Dan Ariely, one of the researchers on the study, calls this the “IKEA effect.”

IKEA sells ready-to-assemble household furnishings. Unlike its competitors selling pre-assembled merchandise, IKEA puts its customers to work. It turns out there’s a hidden benefit to making the user invest physical effort in assembling the product. Ariely believes that by asking customers to assemble their own furniture, they adopt an irrational love of the furniture they built, just like the test subjects did in the origami experiments.

Businesses that leverage user effort confer higher value to their products simply because their users have put work into them. The users have invested in the products through their labor.

Consistency counts

How much do past behaviors alter our future actions? We’d like to think we are free to choose to act in any way we’d like — that our judgment is not clouded by our past actions. But studies reveal that our past is an excellent predictor of our future.

A team of researchers asked a group of suburban residents to place large, unsightly signs in front of their homes which read “Drive Carefully.” Two groups were tested.

In the first group, only 17 percent of the subjects agreed to the request, while 76 percent of those in the second group agreed to post the ugly yard signs. What was the cause of this huge discrepancy? There was one difference between the two groups.

Those in the second group were approached two weeks prior to the yard sign request and asked to place a much smaller, three-inch sign with the words, “Be a safe driver,” in their window. Nearly everyone who was asked to place the smaller message agreed. When the researchers returned two weeks later, a whopping majority of these residents willingly replaced the small sign with the large one on their front lawns.

The homeowner’s greater willingness to place the large, obtrusive sign on their lawns after agreeing to the smaller ones demonstrates the impact of our predilection for consistency with our past behaviors. Little investments, such as placing a tiny sign in a window, can lead to big changes in future behaviors.

We avoid cognitive dissonance

In a classic Aesop’s Fable, a hungry fox encounters grapes hanging from a vine. The fox desperately wants the grapes. But as hard as he may try, he can not reach them. Frustrated, the fox decides the grapes must be sour and that he therefore would not want them anyway.

In the story, the fox comforts himself by changing his perception of the grapes because it is too uncomfortable to reconcile the thought that the grapes are sweet and ready for the taking, and yet, he can not have them. To reconcile these two conflicting ideas, the fox changes his perception of the grapes and in the process relieves the pain of what psychologists call “cognitive dissonance.”

The irrational manipulation of the way one sees the world is not limited to fictional animals in children’s stories. We humans do this as well.

Consider your reaction the first time you sipped a beer or tried spicy food. Was it tasty? Unlikely. Our bodies are designed to reject alcohol and capsaicin, the compound that creates the sensation of heat in spicy food. Our innate reaction to these acquired tastes is to reject them, and yet, we learn to like them through repeated exposure. We see others enjoying them, try a little more, and over time condition ourselves.

To avoid the cognitive dissonance of not liking something others seem to take so much pleasure in, we slowly change our perception of the thing we once did not enjoy.

Small investments, big returns

Together, the three tendencies described above influence customers’ future behaviors. The more effort we put into something, the more likely we are to value it. We are more likely to be consistent with our past behaviors. And finally, we change our preferences to avoid cognitive dissonance.

In sum, our tendencies lead a mental process known as rationalization, whereby we change our attitudes and beliefs to psychologically adapt. Rationalization helps us give reasons for our behaviors, even when those reasons might have been designed by others.

Businesses utilize these three psychological tendencies to help consumers take small actions that put effort into the product or service. These investments can take the various forms including time, money, data, content, reputation, or skill, but the results are the same. By asking users to commit to a product or service in small increments, companies can change user preferences, tastes and habits.